The money-go-round

Let’s get this straight.

  • Most money is created by banks as debt, i.e. ‘out of thin air’.
  • Banks ensure they keep plenty for themselves, the grandest buildings, the biggest salaries, huge bonuses.
  • Eventually they always lend too much, confidence declines, some bank(s) get(s) into trouble because there is a run on the bank, because the money doesn’t really exist.
  • So a bank or two fails, but is usually bailed out by governments.
  • So governments need to borrow a bit more from… banks.
  • And/or they take it from the people by ‘austerity’, reduced public services or additional taxation.
  • And they say there was too much debt, another way of saying it was the banks wot did it.
  • And the most egregious banking behaviour appears to be but lightly punished – the rewards appear to greatly outweigh the risks.

You couldn’t make it up!

There must be a better system. At least someone’s proposing solutions. See eg Positive Money.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s